7 steps to boosting your credit score before Christmas: Expert insight
Are you evaluating the possibility of applying for a mortgage next year? Or do you want to take up a small loan for home repairs? Everyone wants to be on top of Christmas preparations. However, low savings may not support the requirements. Don’t worry, as instant loans may help.
You must ensure a decent credit score for that. Moreover, popular financial expert Martin Lewis stresses boosting credit scores before Christmas. He advises individuals to check their credit scores once a year (during Christmas times). It helps you identify anomalies and prevent credit rejections.
Update credit whether you want to purchase gifts, furniture, or decorate your home. It could prove much cheaper, then. The blog discusses expert points. Read ahead and act!
Why is it important to understand credit scores during Christmas?
Borrowing gets costly during Christmas and New Year. Improving financial aspects fetch cheap personal loans and credit cards. Pre-qualify if confused.
“a loan application means hard searches. They go on the file and the other lenders may see it. It may harm your credit profile. So, use an eligibility checker that helps you know the card or the loan you may get. It uses a soft credit check technique that does not affect credit assessment and score.”
The ideal loan that you may get, according to the checker, prevents finances. It helps understand credit requirements, expected instalments and loan costs. Thus, you never pay more than you generally can afford. It safeguards your financial interests. Moreover, knowing your credit score during Christmas helps with:
- Analysing the difference between borrowing during Christmas and post that.
- It helps you identify cheap financial equipment to use against credit cards
- Avoid borrowing unnecessarily and ensure financial balance
How to improve your credit score within 20 days?
Making timely payments is the best way to keep your score high. Martin says “Use applications like Canopy and Credit Ladder to track and pay the rent timely.” Rentals account for nearly 40% of one’s income. Thus, ensuring regular payments prevents you from accumulating high-interest debt. Here are other expert tips to enhance your credit score before Christmas 2024:
1) Step 1-Check errors on your credit report
The smallest errors may affect your credit score. It could be – multiple entries, the wrong loan in your name, etc. Analyse at least the last 6 months of your credit report entries. Check for the pending payments and alien ones. Prepare a list of the debts to pay.
Next, check- spelling regarding – address, email, name, etc. Even a single typo may lead to loan rejection. Moreover, check incorrect information that occurred on your credit report during unemployment and injury. Reach out to the credit agency to include a Notice of correction to your credit report.
A Notice of Correction is a small document added to a credit report. It explains inaccurate transactions or misleading information. This document does not affect your credit score.
2) Step 2- Check pending payments and reminders
Sometimes, payment reminders don’t work. It could be due to unsubscribed mail or other reasons. Check your current liabilities and scheduled reminders. If it does not work, set direct debits for the costliest debts. It will help you repay the primary dues timely. Thus, it keeps your credit in good shape. Later, you can fix the small debts the same way. For example:
| Debts to clear first | Debts to clear next |
| Payday loans | Home repair loans |
| Credit cards | Mortgage |
| Overdrafts | Student loans |
| Short-term loans | Car loans |
- Step 3- Limit using overdrafts for a while
Overdrafts are short-term cash facilities for individuals. However, these share high interest rates. Most individuals depend on overdrafts for small needs. Reduce this dependency until Christmas. Make sure that you use it only under extreme emergencies, not for routine expenses.
You can instead seek a guaranteed loan approval on instant decision loans for bad credit. It helps you get a better amount than an overdraft. Moreover, you can meet your needs cheaply. Yes, you pay low with guaranteed loans instead of an overdraft. However, you may get approval only if you can afford the payments. Using such financial facilities helps ensure financial discipline.
4) Step 4- monitor credit utilisation
Credit utilisation is the funds of credit you utilise against your income and availability. It is generally ideal to use only 30% of your credit for your needs. The ratio must not exceed 40% (in challenging cases). You can take a few steps to regulate the ratio until Christmas:
These steps will help you keep your finances in check. Moreover, it prevents you from tapping any unnecessary debt that may change your credit score.
For instance, if your honour card has a limit of £1000 and you use only £500, It means you have a credit utilisation rate of 50%. It is still high. However, if you use only £300 instead of £500, it will be 70%. Loan providers may take this positively. You may get better rates on Christmas-related borrowings.
5) Step 5- Set credit score change alert
What is the benefit of creating efforts to improve credit if you cannot get updates?
Yes, you can set credit score change alerts. It will help you monitor any suspicious activity and act immediately. Organisations like Experian, Equifax and NatWest provide the facility. If you notice any activities like- an unnoticed transaction, an alien credit card, or a loan in your name, report it.
It may affect your credit score. Check your credit report frequently after encountering such activities. Always be in touch with credit agencies.
6) Step 6- Try a credit builder loan
If you don’t see your credit score moving despite efforts, a credit builder loan may help. It will help you create and improve credit from scratch. A credit builder loan is perfect for individuals with a low credit history seeking improvement. It may also help persons with poor scores or pending debts. You can take up a monthly loan to boost your credit score. Yes, you may benefit from this. It works just like a savings account. You deposit a fixed amount monthly in a specific account.
You do so until the loan period. Later, you get the amount you deposited with interest back. You can see the miraculous change in your credit score. However, you must retain the performance. Avoid skipping any loan or utility payment after improving your credit score.
However, if you want to continue for the long term, don’t worry. Check if you can get 12 month loans without no guarantor for the same purpose. You can deposit a fixed amount for up to 12 months. Get it later after maturity. It may be helpful if you are seeking a mortgage in the new year or some major lifestyle change.
7) Step 7- Seek loans with consistent credit information
According to Money Saving Expert chief– Martin-
“Ensuring consistency on your credit applications is important. Individual loan providers evaluate the profile for long-term employment and residential history. Borrowers with sound income and stable address proof may help.”
He further adds, –
“Always use consistent answers on the application. It includes your mobile number, address and job title.”
Identify your current residential address on the credit report. Check when you last updated your income. Are there any gaps? If yes, you must send a letter to the creditor and agencies. It may explain your valid reason behind the gap. Next, borrow only what you can afford to repay later. It helps you step -in the New Year without any backlogs.
Bottom line
These are some expert steps to lift your credit score before Christmas. Individuals may have more than one credit score. Loan providers may consider any credit agency’s report. However, it does not differ much. The above-listed tips may prepare your credit for Christmas expenses. Taking these initiatives makes borrowing affordable later. You may meet any occasional requirements without paying more.
Ailsa Adam is the Editor-in-Chief and former content head at Hugeloanlender. She has been a valuable member of the content strategy team since 2017 due to her abundant experience in the finance sector. Passionate about helping individuals navigate the world of loans and personal finance, she has dedicated herself to acquiring extensive knowledge on various financial products. Before her role at Hugeloanlender,
Ailsa worked as a seasoned journalist and writer, specialising in creating informative blogs and articles on diverse loan types. She is known for her meticulous research and commitment to delivering accurate and engaging content. She holds a degree in MBA Finance and has a keen interest in creative writing and art.
